Vision # 5 - Independence Plan Basics

We need a 'roadmap' to layout how we are going to get from where we are now (totally dependent on a job at a large company) to where we want to be (independent, working for ourselves, more connected with the land, setting a great entrepreneurial and creative example to our children).  We have so many ideas, but also a lot of constraints - the age of the children, the size of the mortgage, availability of capital and so on.  The transition is going to have to be carefully managed and will take quite a few years.

My starting point for laying out the plan is simple - adding up all of our current income and calling it 100%.  I contribute to a work pension, and my employer also contributes, and this isn't taken into account in the 100%.

There are 4 points on the 'road', and effectively 3 'stages' on the route.  The four points are:

1. Dependence.  Where we are now.

2. Subsistence.  The next step, where it is possible to eliminate the main job, and replace it with a mixture of savings and new income streams, replace our current income to the value of 100% (i.e. same potential 'living standard' as today, but without making any pension provision for the future).

3. Sufficiency.  The step after subsistence, where approximately 110% of current income is achieved.  This means we have todays potential 'living standard' AND we're building a pension fund at the same rate as today.  At this stage it would be great for at least one of us to have totally eliminated 'outside' work, focussing 100% on Tymawr-Farm.

4. Abundance.  When income comfortably exceeds outgoings, say a minimum of 130% of current income, it should be possible to lead an enhanced, modern and generous lifestyle.  At this stage I see all 'outside' work being totally eliminated, and even to bring other partners, contractors or even employees into our business.

To be clear, when I use the term 'income' in all of the above, I don't mean to distinguish between making a cost saving and increasing income i.e. if we eliminated oil as a fuel to heat our home and saved an amount equivalent to 5% of our current income I would treat that as 5% additional income in my analysis.  In fact, cost saving ideas can be even more effective than income generating ideas as they are not subject to tax (i.e. for every extra £1 I earn I take home ~ £0.70, but for every £1 I save I REALLY benefit by the full £1).  However, as a wise man once said "No-one ever cost-reduced themselves to glory"!

Having made some basic definitions, the next part of the plan is to organise our ideas by stage (Dependence-Subsistence, Subsistence-Sufficiency, Sufficiency - Abundance), and then work out what is feasible / manageable in a given time scale.

Other key factors on the timeline are the ages of our children and our own ages: the former determines when nursery fees stop, and when days become more structured (school); the latter defines a 'latest feasible' point for the plan - I don't want to start working on the smallholding when I'm 65!

Going to go back to basics and put the above on paper (with a pen!) later, will scan and upload later this week.

Initial 'back of an envelope' scribblings suggest that it may be possible to 'go it alone' and at least start the Sufficiency-Abundance stage by 2020, which seems like a long way away right now.

Back to work tomorrow!